“From now until the beginning of next year is full of interest-rate-cut pressure,” Zhou said in Hong Kong, where the Financial Stability Forum is meeting.

Consumer prices are “going down and sometimes even faster than we think,” he said.

China’s economy, the world’s fourth largest, may be heading for its slowest growth in two decades as the global financial crisis cuts demand.

The government pledged on Saturday to boost liquidity after cutting interest rates last month by the most in 11 years to spur lending and consumption.

SHORT, SHARP, SHOCK

“They realize now that the risk is of 5 to 6 percent growth next year,” said Dwyfor Evans, a strategist with State Street Global Markets in Hong Kong. “They will use interest rates, money supply, bank lending — the full spectrum of monetary stimulus. It’s short, sharp, shock treatment.”

Spending on factories and real estate rose 26.8 percent in the first 11 months from a year earlier, down from a 27.2 percent gain through October, the statistics bureau said yesterday.

Industrial output grew the least since 1999 last month, exports fell for the first time in seven years and inflation was the weakest in almost two years, reports showed in the past week.

China’s slowdown is deepening before a 4 trillion yuan (US$584 billion) stimulus package announced last month kicks in. The central bank has reduced the one-year lending rate to 5.58 percent from 7.47 percent in September and dropped quotas limiting lending by banks.